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SBI vs HDFC Bank vs ICICI Bank: Extended loan EMI moratorium terms and conditions

ET Online|
Last Updated: Jun 02, 2020, 01.08 PM IST
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Summary Do keep in mind that the moratorium is not a waiver of your EMIs for six months, instead it is a grace period, to help you tide over financial exigencies caused due to the lockdown.

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On March 27, the Reserve Bank of India (RBI) announced that all lending institutions (like banks and NBFCs) should offer a three-month moratorium on term loan equated monthly instalments (EMIs) to their borrowers. The EMI holiday was supposed to end on May 31. However, due to the extension of the lockdown and the hardships faced by borrowers, RBI extended the moratorium period by three more months. The loan EMI moratorium will now end on August 31, 2020 and this makes it a six-month moratorium starting from March 1, 2020 to August 31, 2020.

Under the central bank's relief package, lending institutions have been instructed to give borrowers a grace period of six months for payment of EMIs. These include home loans, auto loans, personal loans, EMIs on debit cards and even credit card dues.

By opting for the EMI holiday, you need not pay EMIs for March, April, May, June, July and August. Do keep in mind that the moratorium is not a waiver of your EMIs for six months, instead it is a grace period, to help you tide over financial exigencies due to the lockdown.

Here is a look at the details of the extended loan EMI moratorium of the State Bank of India (SBI), HDFC Bank and ICICI Bank.

SBI
SBI has said that it is proactively reaching out to all of its eligible loan customers to obtain their consent to stop their Standing Instructions (SI) /NACH mandate for the EMIs falling due from 01.06.2020 to 31.08.2020. For this, the bank has simplified the process of stopping the EMIs by initiating a SMS communication to all eligible customers to stop EMIs.

Options for customer
Customers who do not want to defer recovery of instalments /EMI: No action is required. They may continue to pay in usual course.

Customers who wants to defer recovery of instalments/EMI
Standing Instruction (SI): SMS Reply <YES> to VMN within 5 days from the receipt of SMS.
NACH: SMS Reply <STOP 1234>, (Where 1234 is the last 4 digits of their loan A/c no) to VMN within 5 days from the receipt of SMS.

You may not receive the SMS in case your mobile number is different from the number registered with the bank.

Impact of deferment
Interest shall continue to accrue on the outstanding portion of the Term Loan during the moratorium period.

Impact in case of home loan
Those who availed the first 3 months deferment and want to avail further deferment for 3 month: For a loan of Rs. 30 Lacs with a remaining maturity of 15 years the additional interest payable would be Rs.4.54 approx. equal to additional 16 EMIs.
Those who would like to avail this deferment benefit for the first time: For a loan of Rs. 30 Lacs with a remaining maturity of 15 years the additional interest payable would be Rs.2.34 lac approx. equal to additional 8 EMIs.

HDFC Bank
The EMI payments in the month of Jun 2020 will be processed on the due dates as per standard process. For customers who will apply for EMI Moratorium in June 2020, and their June EMI has already been deducted, they will get an EMI refund in 5 working days from the date of their successful EMI moratorium application. On your Credit Card, if you wish to avail the moratorium from June 2020, you may defer your outstanding payment (i.e. make NIL payment) or disable the Autopay from NetBanking.

If you had already opted for the Mar-May moratorium it will nit continue on to June-August. You will have to make a fresh application on the link provided to register for the moratorium facility for the period of Jun-Aug 2020.

In case you are interested in availing the moratorium, we encourage you to avail of the Moratorium for the month of Jun 2020 only at this point in time as a prudent financial measure. You can come back and apply again for Jul and Aug later if you so desire.

If you choose the EMI Moratorium, it would be applicable post the Bank accepting the application for the moratorium.

Please note that if you have the ability to pay your EMI, then you should consider paying your EMI for the period of Jun-Aug as per regular schedule. Availing the moratorium will incur an additional interest charge on your loan outstanding which you have to repay in the form of additional EMIs once the moratorium period is over.

If you choose EMI moratorium,

Bank will not ask for any EMI Payment for the period of moratorium availed by you i.e. till Jun 30th 2020 if you avail it for one month or till Aug 31st 2020 if you avail it for 3 months.

Interest will continue to accrue on the principal outstanding for the period of the moratorium at the contracted rate of the loan.
The loan tenure will get extended post application of moratorium.

If you avail the EMI moratorium, there will be a levy of interest at the contracted rate of the loan for the period of EMI moratorium on the loan outstanding. Such interest will be collected by extending the original tenor of the loan accordingly.

Illustration Auto Loan: Loan amount Rs. 8 Lacs, remaining tenor 36M, Last EMI on 7-May-23, opting for 3 months Moratorium i.e. Jun-20, Jul-20 & Aug-20 EMI. The additional interest at the contracted rate would be about Rs. 25,500 and the same would be added to the principal outstanding as on 31 Aug 2020. The resultant tenor would increase by four months, and the last EMI including the interest recovery would be on 7-Sep-23.

Illustration Salaried Personal Loan: Loan amount Rs. 4 Lacs, remaining tenor 48M, Last EMI on 4-Jun-24, opting for 2 months Moratorium i.e. Jul-20, Aug 20 EMIs. The additional interest at the contracted rate would be about Rs. 15,000/-, and the same would be added to the principal outstanding as on 31 Aug 2020. The resultant tenor would increase by 1.4 EMI, and the last instalment (40% of regular EMI) would be on 4-Oct-24.

ICICI Bank
ICICI Bank is offering you a choice of either paying for your loans/ credit facilities or opting for a moratorium, which is the postponement of instalments or payments, up to June, 2020. In case you choose to opt for a moratorium, then the applicable interest on the amount outstanding will continue to be charged during the period of moratorium. The payment schedule would be extended to recover the postponed instalments or payments which will include the outstanding principal and interest.

Interest on the outstanding amount of the facilities availed shall continue to accrue during this period and the accumulated accrued interest shall be payable immediately after the completion of the moratorium.

Currently you can apply for a moratorium only for June, 2020 and this application can be done till June 24, 2020. If you wish to avail a moratorium for the months of July and August, 2020, you will need to re-apply and the bank will notify you regarding the same.
Submit your moratorium request at least 5 working days before your EMI due date. If you submit the request in less than 5 working days from your EMI due date or after EMI due date and the EMI is debited, then refund of EMI shall be processed within 7 working days.

In case you DO NOT opt for moratorium by responding on the website, your loan instalments will continue to be debited every month as per existing process/contract with the Bank.

How can I opt for the moratorium?
You can opt for the moratorium by clicking on the link shared with you by the Bank through SMS or e-mail. You may also visit the Bank’s website.

Is there any specific time frame where Moratorium 2.0 to be applied monthly?
Customer needs to submit the moratorium request at least 5 working days before his EMI due date. if he submits his request in less than 5 working days from his EMI due date or after 5 working days of the EMI due date and EMI is debited, then the refund of EMI shall be processed within 7 working days.

I want to apply moratorium for the month of April or May ’20 now? Is it possible?
No, you can apply moratorium from the month of June’20 onwards and not for April’20 or May ’20.

If moratorium is already availed during March 1, 2020 to May 31, 2020, will it get automatically extended till August 31, 2020?
No. You need to login to www.icicibank.com and exercise the moratorium option for each month to continue to avail this moratorium monthly till August 31, 2020. You need to visit the website and opt for moratorium option every month. In case you DO NOT opt for moratorium for each month for month of June 20, July 20 and August 20, your instalment for respective months will be debited from June 2020 onwards each month.

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